Skip to content

Commit

Permalink
doc: preliquidationparams restriction in readme
Browse files Browse the repository at this point in the history
  • Loading branch information
peyha committed Oct 4, 2024
1 parent c2cf66d commit c3cd94f
Showing 1 changed file with 12 additions and 0 deletions.
12 changes: 12 additions & 0 deletions README.md
Original file line number Diff line number Diff line change
Expand Up @@ -36,6 +36,18 @@ The two main use-cases are:
1. Using normal fixed parameters when `preLIF1 = preLIF2` and `preLCF1 = preLCF2`.
2. Using health dependent liquidation when either `preLIF1 < preLIF2` or `preLCF1 < preLCF2`, similar to a Quasi Dutch Auction (as in [Euler liquidations](https://docs-v1.euler.finance/getting-started/white-paper#liquidations)).


### Pre-liquidation parameters restrictions

The PreLiquidation smart-contract enforces:
1. preLltv < LLTV;
2. preLCF1 <= preLCF2;
3. WAD <= preLIF1 <= preLIF2.

Note that `preLCF1 <= WAD` and `preLCF1 <= WAD` is not mandatory.
Indeed without this, the close factor can reach 100% when the position LTV is less than LLTV allowing additionnal pre-liquidation close factor configurations.
A pre-liquidation close factor higher than 100% means that the whole position is liquidatable.

### `onPreLiquidate` callback

By calling `preLiquidate` with a smart contract that implements the `IPreLiquidationCallback` interface, the liquidator can be called back.
Expand Down

0 comments on commit c3cd94f

Please sign in to comment.